The board of directors of Eicher Motors has announced to unanimously reappoint Siddhartha Lal as the Managing Director of the company.
The decision is subject to the shareholders’ approval and the board going back to them for fresh clearance through postal ballot with Siddhartha planned to re-hired with a revised remuneration package.
The shareholders had earlier rejected the proposal of reappointing Siddhartha Lal as MD and also rejected the payment structure offered to him, at the company's 39th Annual General Meeting.
The company shared the primary concern of the shareholders was not Lal’s reappointment or the proposed compensation but the lack of clarity regarding the pay structure that potentially allowed paying a remuneration of up to 3% of profits.
According to the company's statement, it had the same limit of 3% for the last 4 years but in reality, they have paid only a fraction of that amount. It also added that the remuneration during FY21 was 1.04% of profits, with the preceding years being at a lower percentage.
“The median, which is a measure of central tendency, is impacted by entries and exits of employees,” said Manvi Sinha, independent director and chairperson of the Nomination and Remuneration Committee at Eicher Motors.
Siddhartha Lal was credited with reviving the brand image of Royal Enfield since he took charge as MD in 2006-07. Yesterday, The Royal Enfield Employees Union also came out in public, seeking his re-appointment, stating he was good for the company and employees.
S Sandilya, chairman of Eicher Motors, commented on how Siddhartha has been instrumental in building the foundation and a razor-sharp business focus for Royal Enfield. His first major initiative was to shed a wide number of under-performing businesses in the portfolio, and to focus on Royal Enfield motorcycles and Eicher trucks and buses.
The company’s revenues have grown from Rs 375 crore in calendar year 2009 to Rs 8,720 crore (consolidated revenues) in FY21, while the joint venture with Volvo - VE Commercial Vehicles Ltd had revenues of Rs 8,676 crore. This has resulted in unprecedented shareholder value growth of over 17,500 per cent in 12 years, Sandilya added.
With the official announcement of his re-hiring made by Eicher and also receiving a public backing from The Royal Enfield Employees Union, it will be interesting to see how Siddhartha Lal leads Eicher in charting the new horizons of the pandemic -stricken market.